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JPMorgan lately raised its projections for weight reduction medicine, anticipating the drug class often known as GLP-1 agonists to deliver over $100B in annual gross sales by 2030 in a duopoly managed by Novo Nordisk (NVO) (OTCPK:NONOF) and Eli Lilly (NYSE:LLY).
In a analysis notice final week, JPMorgan analyst Chris Schott stated that he didn’t rule out additional gross sales upside for GLP-1s in weight problems and diabetes, the place the uptake of the drug class is quick rising amid social media hype.
JPMorgan’s revised estimate follows LLY’s better-than-expected Q2 gross sales for its twin GIP/GLP-1 agonist, Mounjaro. It additionally comes after Novo (NVO) introduced topline information from its Part 3 SELECT trial in August, demonstrating that its GLP-1 agonist semaglutide introduced cardiovascular benefits in obesity.
In 2021, Novo (NVO) launched semaglutide as Wegovy for weight reduction after advertising and marketing a lower-dose model of the drug, as Ozempic for kind 2 diabetes. The medicine focused at a intestine hormone referred to as incretin helped the Danish drugmaker turn into essentially the most invaluable European company this month.
“From a market share perspective, we see the incretin market largely remaining a duopoly between LLY and Novo,” Schott wrote.
Nevertheless, rising recognition and Mounjaro’s off-label use for weight reduction have pressured provides and led to copycat variations, with a month’s provide of semaglutide costing as much as $1.5K.
JPMorgan expects GLP-1 costs to say no over time amid enhancements in provide and entry. The agency initiatives GLP-1 pricing to succeed in $325–$350 per therapy, implying a $4K annual value by the tip of the last decade.
In July, JPMorgan dominated out a “winner-takes-all competitors” within the weight problems drug market, the place potential new entrants might embrace Pfizer (PFE) and Amgen (AMGN), that are additionally advancing GLP-1 candidates.
With Eli Lilly (LLY) anticipated to obtain FDA approval this 12 months to market Mounjaro for weight reduction, the inventory stays considered one of JPMorgan’s favorites amongst GLP-1 builders with an Chubby score and a $600 per share goal.
“We see significant upside to Avenue estimates for Mounjaro and LLY’s broader incretin portfolio over time in addition to a positive setup on the inventory heading into numerous essential catalysts in 2023 and early 2024,” Schott wrote.
A possible FDA approval of the corporate’s Alzheimer’s remedy donanemab and full information from Novo’s (NVO) SELECT trial are amongst among the occasions that would drive LLY’s shares greater, the analyst identified.
JPMorgan stands forward of the consensus on LLY’s GLP-1 prospects, anticipating the drug class to deliver ~$50B in gross sales in 2030 for the corporate, up from ~$8B, ~$23B, and ~$34B in 2022, 2025, and 2027, respectively.
Its 2030 forecast is underpinned by excessive weight problems charges within the U.S. (35%–40% prevalence amongst adults) and bettering reimbursements over time, together with potential Medicare protection for weight problems medicine by the tip of the last decade.
JPMorgan additionally highlights LLY’s next-gen weight reduction medicine, notably the oral GLP-1 agonist Orforglipron, which precipitated as much as ~15% weight reduction after 36 weeks of remedy in a Phase 2 trial.